Classify voluntary settlements as extension or a composition

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Reference no: EM131315496

For a firm with outstanding debt of $2.4 million, classify each of the following voluntary settlements as an extension, a composition, or a combination of the two.

a. Paying all creditors 40 cents on the dollar in exchange for complete discharge of the debt.

b. Paying all creditors in full in three periodic installments.

c. Paying a group of creditors with claims of $1 million in full over two years and immediately paying the remaining creditors 75 cents on the dollar.

Reference no: EM131315496

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